S. 1498, Halting Ownership and Non-Ethical Stock Transactions Act (HONEST) Act

S. 1498 would prohibit Members of Congress, the President, the Vice President and their spouses and dependent children from owning or trading certain financial assets. The bill would require covered individuals to divest from those assets immediately after taking a new oath of office or being newly sworn in.

The sale of assets that have appreciated in value would typically trigger tax liability on those capital gains. Under current law, the tax code allows most federal employees who are required to divest property in order to avoid a conflict of interest or the appearance of a conflict to obtain a certificate of divestiture, which allows them to reinvest the proceeds of a required sale into certain approved assets (such as U.S. Treasuries or diversified mutual funds) and to defer the taxable realization of the capital gains until those assets are sold in the future. The bill would amend the tax code to apply such treatment to Members of Congress, the President, and the Vice President, as well as their family members.

The Congressional Budget Act of 1974, as amended, stipulates that revenue estimates provided by the staff of the Joint Committee on Taxation (JCT) will be the official estimates for all tax legislation considered by the Congress. As such, CBO incorporates those estimates into its cost estimates of the effects of legislation.

The costs of the legislation, detailed in Table 1, fall within budget function 800 (general government).

For this estimate, CBO and JCT assume that the bill will be enacted near the beginning of calendar year 2026.

JCT estimates that enacting S. 1498 would reduce revenues related to the divesture of assets by $6 million over the 2026-2035 period.

S. 1498 also would create new civil monetary penalties for violating the bill’s provisions. Thus, enacting the bill could increase collections of civil penalties, which are treated as revenues in the budget. CBO estimates that any increase in revenues would be insignificant in every year and over the 2026-2035 period because we expect few violations of the bill’s new prohibitions.

CBO estimates that implementing S. 1498 would increase administrative costs by less than $500,000 over the 2026-2030 period; any related spending would be subject to the availability of appropriated funds.

S. 1498 would impose a private-sector mandate as defined in the Unfunded Mandates Reform Act (UMRA) by prohibiting the spouses and dependent children (those who are under 19 years of age) of Members of Congress, the President, and the Vice President from owning certain investments. Those investments include corporate stocks and bonds, digital assets, commodities, and derivatives. The bill would impose a similar ban on those elected officials; however, CBO does not consider that prohibition to be a mandate because it would arise from voluntarily serving in office. Because CBO lacks comprehensive information about the current assets of elected officials’ and their families, CBO cannot determine whether the cost of the mandate would exceed the annual private-sector threshold established in UMRA ($206 million in 2025, adjusted annually for inflation).

The bill would not impose any intergovernmental mandates.

The CBO staff contacts for this estimate are Matthew Pickford (for federal costs) and Andrew Laughlin (for mandates). The estimate was reviewed by H. Samuel Papenfuss, Deputy Director of Budget Analysis and John McClelland, Director of Tax Analysis.